United States District Court, W.D. Arkansas, Hot Springs Division
TANNER'S TRUCK & EQUIPMENT, INC. PLAINTIFF
v.
BRIAN MUMEY and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY DEFENDANTS
ORDER
Susan
O. Hickey Chief United States District Judge
Before
the Court is Defendant State Farm Mutual Automobile Insurance
Company (“State Farm”)'s Motion to Dismiss.
(ECF No. 5). Plaintiff Tanner's Truck & Equipment,
Inc. filed a response. (ECF No. 13). State Farm filed a
reply. (ECF No. 18). The Court finds the matter ripe for
consideration.
I.
BACKGROUND [1]
On July
20, 2019, a recreational vehicle (“RV”) owned by
Defendant Brian Mumey (“Mumey”) caught fire and
became disabled on the Highway 270 bypass near Hot Springs,
Arkansas. The Garland County Sheriff's Office contacted
Plaintiff to assist with recovery and site remediation. State
Farm allegedly confirmed to Plaintiff that Mumey held a State
Farm insurance policy covering the RV for hazardous waste
removal, remediation, and disposal costs. Plaintiff then
removed the RV from the highway, stored the RV's remains
pending payment, and provided cleanup and remediation
services at the site.
On July
22, 2019, Plaintiff contacted State Farm again and provided
an invoice for services rendered. A State Farm agent
allegedly approved the invoice and confirmed coverage for the
services listed on the invoice. On August 5, 2019, State Farm
requested that Plaintiff separate its invoice into separate
categories of “liability” incurred by the RV and
“cleanup” of the fuel spill and other hazardous
waste. Plaintiff alleges that Mumey subsequently received
money from State Farm but refuses to pay for Plaintiff's
services.
On
November 4, 2019, Plaintiff filed this action in the Circuit
Court of Hot Spring County, Arkansas. Plaintiff seeks $14,
908.44 and accumulated storage costs calculated at
$75.00/day. Plaintiff also seeks $50, 000.00 in connection
with fraud perpetrated by State Farm, as its statements
regarding the availability of coverage on Mumey's RV
allegedly induced Plaintiff to perform the cleanup and
remediation services. On December 3, 2019, State Farm removed
the case to this Court pursuant to 28 U.S.C. § 1332,
which allows for removal when there is complete diversity
between parties and the amount of controversy exceeds $75,
000.
On
December 3, 2019, State Farm also filed the instant motion to
dismiss, seeking dismissal of the fraud claim against it
because Plaintiff failed to plead the claim with
particularity, as required by Arkansas Rule of Civil
Procedure 9(b). Plaintiff opposes the motion.
II.
STANDARD
A party
may move to dismiss for failure to state a claim upon which
relief can be granted. Fed.R.Civ.P. 12(b)(6). The purpose of
a motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) is to test the legal sufficiency of the complaint,
so the court's inquiry is limited to whether the
challenged pleadings set forth sufficient allegations to make
out the elements of a right to relief. Peck v. Hoff,
660 F.2d 371, 374 (8th Cir. 1981).
Ordinarily,
to survive a motion to dismiss under Rule 12(b)(6), a
pleading must provide “a short and plain statement of
the claim that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). However, claims sounding in fraud are
controlled by the heightened pleading standard of Federal
Rule of Civil Procedure 9(b).[2] Rule 9(b) requires plaintiffs to
plead “the circumstances constituting fraud . . . with
particularity.” Fed.R.Civ.P. 9(b). To this end, the
plaintiff must plead “such matters as the time, place
and contents of false representations, as well as the
identity of the person making the misrepresentation and what
was obtained or given up thereby.” Abels v. Farmers
Commodities Corp., 259 F.3d 910, 920 (8th Cir. 2001)
(internal citation and quotation omitted). In other words,
the party must specify the “who, what, where, when, and
how” of the alleged fraud. United States ex rel.
Costner v. URS Consultants, Inc., 317 F.3d 883, 888 (8th
Cir. 2003). “Malice, intent, knowledge, and other
conditions of a person's mind may be alleged
generally.” Fed.R.Civ.P. 9(b). However,
“[c]onclusory allegations that a defendant's
conduct was fraudulent and deceptive are not sufficient to
satisfy the rule.” Commercial Prop. Invs. Inc. v.
Quality Inns Int'l Inc., 61 F.3d 639, 644 (8th Cir.
1995).
III.
DISCUSSION
State
Farm asserts that Plaintiff fails to state a claim of fraud
upon which relief may be granted because it does not allege
with particularity that State Farm knew or believed it was
making a false statement, an essential element of fraud in
Arkansas. Accordingly, State Farm requests that the Court
dismiss Plaintiff's complaint.
In
response, Plaintiff states that State Farm represented that
Mumey's RV had insurance coverage. Plaintiff argues that
State Farm, the issuer of the policy on Mumey's RV, knew
or should have known that statement was false because
Mumey's policy had a $250.00 limit for debris removal.
Plaintiff argues further that State Farm intended to induce
Plaintiff to perform hazardous waste removal. In support of
these arguments, Plaintiff offers the affidavit of Jason
Tanner, Plaintiff's principal operator. (ECF No. 15). In
short, the affidavit states that Plaintiff performed the
cleanup and remediation services based on the representation
of State Farm agents that Mumey's RV had sufficient
insurance coverage and that, had Plaintiff been informed that
Mumey's policy had a $250.00 limit for debris removal,
Plaintiff would not have performed the work.
In
reply, State Farm states that Rule 12(b)(6) motions are
ordinarily decided based on the pleadings alone. State Farm
argues that the Court should not consider Plaintiff's
affidavit and that, looking solely at the four corners ...